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  • March 2015 (Revised April 2015)
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The Heat Is On: Emerging Ecosystems in the Thermostat Industry

By: David Collis and Ashley Hartman
  • Format:Print
  • | Language:English
  • | Pages:27
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Abstract

Beth Wozniak, President of Honeywell Environmental and Combustion Controls (ECC) at Honeywell International Inc., spun around in her office chair, reflecting about how the classic, mature thermostat industry was rapidly evolving. In February 2014, Google paid $3.2 billion to acquire Nest Labs, a new startup whose goal was to reinvent unloved home devices, such as thermostats and smoke alarms. Their smart thermostats posed a threat to the traditional thermostat business, and it was essential that Honeywell determine the best way to respond. In addition to selling thermostats, Nest had ambitious plans to facilitate connections between Nest and other companies, making it easier for consumers to save money and energy. Many companies were developing smart, connected products that could be controlled remotely. But who really wanted to check ten different apps to make sure the heat was down, the doors were locked, and the lights were turned off? The Internet of Things (IoT) redefined the potential of industries, allowing a company that created a smart, connected product to develop an entire system of products that worked together. How would Honeywell, the mature, industrial company in a basic, mechanical business, compete with the new startup bought by Google and developing its own ecosystem—notably giving away thermostats to Airbnb in return for selling data to utilities?

Keywords

Honeywell; Thermostats; Internet Of Things; Smart Thermostats; Google; Nest; Apple; HomeKit; SmartThings; Partnerships; Platforms And Ecosystems; Linkages; Communication Protocols; Strategy; Technology; Home Automation; Connected Home; Buildings and Facilities; Energy; Information Infrastructure; Applications and Software; Internet and the Web; Digital Platforms; Partners and Partnerships; Manufacturing Industry; Industrial Products Industry; Energy Industry; Electronics Industry; Consumer Products Industry

Citation

Collis, David, and Ashley Hartman. "The Heat Is On: Emerging Ecosytems in the Thermostat Industry." Harvard Business School Case 715-455, March 2015. (Revised April 2015.)
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About The Author

David J. Collis

Strategy
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Related Work

    • March 2015 (Revised April 2015)
    • Faculty Research

    The Heat Is On: Emerging Ecosystems in the Thermostat Industry

    By: David Collis and Ashley Hartman
Related Work
  • The Heat Is On: Emerging Ecosystems in the Thermostat Industry By: David Collis and Ashley Hartman
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